Current Procedural Terminology (CPT®) Codes: An Overview

Current Procedural Terminology, or CPT, is a set of medical codes that categorize medical procedures. Doctors, health insurance companies and accreditation organizations use these codes when notating or collecting data about procedures. CPT codes were developed as a uniform coding system to help providers, such as physicians’ offices and hospitals, accurately submit claims to request reimbursement from payers including insurance companies, Medicaid and Medicare after they’ve provided patient care that may include medical, surgical or diagnostic services.

Anyone who works with medical codes within the United States, like physicians or medical billers and coders, should know CPT codes. If you plan to work in medical billing and coding specifically, you will need to learn CPT coding and become familiar with how to navigate the Current Procedural Terminology database and accurately assign codes to the various procedures that happen in your care facility. Learning CPT codes is a standard part of medical billing and coding education.

You also need a working knowledge of CPT codes to pass the Certified Professional Coder (CPC) exam and other certification exams within the medical billing and coding field. A knowledge of CPT may also be helpful if you’re working in hospital management or healthcare administration, as you will likely interact with some billing information.

Current Procedural Terminology codes are updated on a regular basis. The CPT Editorial Panel, made up of 21 medical professionals, meets 3 times a year to review applications for new codes and discuss revisions to existing ones. The Editorial Panel is supported by a larger body of stakeholders called the CPT Advisory Committee. This group is mostly made up of physicians who are appointed by the national medical specialty societies, which are part of a body called the AMA House of Delegates.

Approved codes then go into effect on January 1 of the following year.

As a code system, CPT codes are broken up into categories. Each category represents a different set of procedures and codes. Here’s a quick breakdown showing what each category is used for and what procedures or devices they represent:

Category 1 codes correspond to procedures or services. For example, a surgical procedure would fall under Category 1. The codes within this category range from 00100 to 99499. These numeric codes are then further ordered into individual subcategories based on anatomy and procedure type.

Category 2 codes are supplemental codes that are attached to a Category 1 code and are used to specify performance measures. These codes are alphanumeric, making it easier to attach them to existing Category 1 codes.

Category 3 codes are used to represent new and emerging technologies, services or procedures. They are primarily used for data collection, assessment and procedures that do not yet meet the criteria for a Category 1 code.

PLA codes are a recent addition to the list of CPT codes. In a way, they are similar to Category 3 codes but are specifically for services and technologies that may belong to either a single care facility, doctor or laboratory, or that may be marketed to multiple labs that have earned FDA approval.

Among the CPT codes are:

As medical coders gain experience and build confidence with CPT coding guidelines, they will discover the levels of accuracy and completeness that are required for clinical documentation as well as their importance.

Some guidelines that medical coders should follow when working with CPT codes are:

Before working on a medical chart, the coder should ensure that the documentation provided by clinicians is complete and accurate, and includes all details of the services provided. Coders should have an understanding of medical terminology and procedures, so they can interpret the clinical documentation and use the code descriptors that most accurately match.

Coders should select the CPT codes that most accurately describe the services provided and comply with guides, such as the ICD-10-CM Official Guidelines for Coding and Reporting, from the Centers for Medicare and Medicaid Services (CMS) and the National Center for Health Statistics (NCHS).

Coders should pay close attention to the details in the documentation, such as anatomical specificity (Which side of the body was the injury on? Were there multiple injuries?) and procedural details (Were multiple procedures performed?)

To justify reimbursement, a patient’s diagnosis must include the service or procedure that was performed. A coder will align ICD-10-CM or ICD-11 diagnosis coding with CPT procedural coding, documenting the patient’s diagnosis and treatment with the highest level of specificity. An example of a diagnosis and service meeting the medical necessity requirement would be a patient presenting with abdominal pain and a doctor conducting a physical examination. The pain (diagnosis) justifies the reason for the examination (service).

Another important CPT coding guideline applies to code bundling and unbundling. In bundling codes, procedures performed during a single patient encounter are grouped together under a single code that represents multiple procedures that were performed together as part of a treatment plan. A bundle could include pre-operative or post-operative care, diagnostic testing and follow-up services. Providers are reimbursed at the payer’s rate for the bundle, regardless of how many individual procedures were performed.

Unbundling occurs when each service is assigned its own code and billed separately. It may be done to more accurately describe the complexity and scope of a patient encounter, or to increase reimbursement. Providers should, however, exercise caution when unbundling, making sure they obtain accurate reimbursement and comply with regulatory standards.

Coders should familiarize themselves with the National Correct Coding Initiative, or the NCCI, which was developed by CMS to promote correct coding of Medicare and Medicaid claims and reduce instances of improper coding.

The purpose of the NCCI procedure-to-procedure (PTP) edits is to prevent improper payments that result when incorrect code combinations are reported. The NCCI contains a table of edits for physicians or practitioners, and another for outpatient hospital services to reference.

The primary difference between CPT and ICD codes is the purposes they’re used for. CPT codes identify the healthcare services that have been provided to a patient, and ICD codes are used to identify diagnoses. ICD-10, or the 10th revision of the ICD system, was introduced in 2019.

They are also managed by two different governing bodies. The CPT code system is managed by the American Medical Association (AMA). And the ICD system is managed by the World Health Organization.

HCPCS, or the Healthcare Common Procedure Coding System, is another of the primary code sets. HCPCS codes are used as Level II of the coding system, which is why they are typically referred to as HCPCS Level II codes. 

The HCPCS system was developed by CMS in a collaboration with the AMA to indicate medical and surgical supplies, hearing and vision services, medical equipment, medications and other items not included in the CPT system. The system was originally used for Medicare patients exclusively, but other payers found the codes to be useful and began requiring providers to use them. CMS updates the HCPCS code system quarterly.

Medical billing modifiers are used to create a more complete description of the care a patient has received by including additional detail about a medical procedure, service or supply that has been provided without changing the meaning of the original code. For example, a modifier might be used to specify the anatomical location of a medical procedure. In the case of CPT codes, they appear as two letters or numbers that follow the basic 5-digit code.

Here’s an example of how CPT code modifiers are used:

A surgeon has performed a procedure to remove a bone cyst in a patient’s upper arm and the procedure also included obtaining a graft from another area of the patient’s body, but minor complications prevented the surgeon from fully excising the bone cyst.

For this procedure, the coder would use code 23140 for the excision of the bone cyst, then add the modifier “52” for reduced services. So the resulting complete code would be 23140-52.